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Companies Struggle
To Pass On Knowledge
That Workers Acquire

By

Scott ThurmStaff Reporter of The Wall Street Journal

Updated Jan. 23, 2006 12:01 a.m. ET

Trying to make conversation during a recent elevator ride, I asked a package-delivery courier whether it was more efficient to start at the top of the building and work down, or start at the bottom of the building and work up. "It depends on the time of day," he replied.

The comment offers a window into one of the modern workplace's most vexing problems, the issue of knowledge management. The courier believed he had figured out something useful about elevator patterns in my San Francisco office building. But what will happen when he moves to a different job or a different route? Will productivity at the delivery company decline until his successor learns the same lessons?

We're all "knowledge workers" now. But few organizations have figured out how to share knowledge among employees, or to pass it on when employees leave or change assignments.

Business gurus have offered dozens of potential solutions. Most involve technology, like asking employees to submit tidbits of expertise to a database that other employees can tap. But few of these efforts have produced big payoffs. Last year, when consulting firm Bain & Co. asked 960 executives about the effectiveness of 25 management tools, knowledge management ranked near the bottom.

The reliance on technology obscures the crucial human issues in learning and teaching. Consider what happened in the early 1990s, when executives at London's water supplier sought to improve efficiency by giving inspectors hand-held computers and eliminating the central dispatching station. It turned out the depot had been more than a place for the inspectors to change clothes and pick up their trucks. It was also where they learned vital tricks of their trade. Dave Snowden, then a knowledge-management consultant for IBM, found that need was so great that the inspectors soon began meeting on their own at a local restaurant and jotting tips in a notebook they stashed behind the counter.

A few years earlier, Julian Orr, an anthropologist then working for
Xerox,
heard remarkably similar stories from copier technicians. Xerox supplied manuals, but the employees told Mr. Orr they more often relied on tips gleaned from colleagues. Backed by Mr. Orr's research, Xerox gave the technicians radios so they could confer while confronting a malfunctioning machine.

This sort of informal knowledge sharing can be very effective, but it's limited in scope. Employees rarely learn from colleagues they don't already know. Moreover, says Thomas H. Davenport, a professor of information management at Babson College, the notion of folks "sitting around telling stories" in the modern downsized corporation is "quaint."

Hence the urge to collect tips in centralized computer databases. But it's not easy to create the critical mass that makes these databases worthwhile. Bain started creating such a system in the late 1980s, asking consultants to write one-page summaries of their projects. By 1999, the firm was collecting summaries for fewer than 40% of its projects, according to Bob Armacost, Bain's director of knowledge management.

But then top managers made the project a priority. They hired some 20 knowledge "brokers" to prod consultants into writing the summaries, and they shifted to a new computer system that made it easier to find useful information. With relentless prodding from the top, Mr. Armacost says, the firm created a virtuous circle where more people used the system, leading more people to contribute.

Xerox managers went through a similar experience as they built a repair database for technicians. At first, Mr. Orr recalls, the technicians were reluctant to submit tips. They didn't "find it natural to write down what they knew," he says. But managers "seeded" the database with suggestions from engineers at headquarters. Some bosses offered rewards, including cash and T-shirts, for submitting tips. Administrators also featured the names of people who contributed, resulting in "thank yous" from colleagues around the world. Today, Xerox's "Eureka" system holds about 70,000 suggestions and saves the company millions of dollars a year in repair costs.

Others are experimenting with different approaches. At
Raytheon's
missile-systems unit in Arizona, employees with extensive technical knowledge pass on what they know with the help of a coach. "We're trying to expedite" a learning process that otherwise could take as long as a decade, says Mary Contini Gordon, who developed the program. She based her approach on the work of Dorothy Leonard, a retired Harvard Business School professor who recommends that companies tap talented employees' insights through this form of "guided experience."

Managers keep trying because the notion of sharing knowledge remains as captivating as it is elusive. Despite their discontent with the results, the executives surveyed by Bain actually increased their use of knowledge-management systems last year.

"We don't necessarily understand enough yet about optimizing the conditions for knowledge work, even though we've been doing it for 25 years," says Hadley Reynolds, research director for the Delphi Group, a consulting firm. "Most organizations are still managing as if we were in the industrial era."

Companies Struggle
To Pass On Knowledge
That Workers Acquire

Trying to make conversation during a recent elevator ride, I asked a package-delivery courier whether it was more efficient to start at the top of the building and work down, or start at the bottom of the building and work up.